The digital won enters the banking system: South Korea launches the second phase of CBDC, while the US blocks development
The Bank of Korea is making a decisive step forward in its central bank digital currency (CBDC) program, moving the pilot project from a laboratory environment into real financial infrastructure. The second phase of testing marks the integration of the digital won into existing banking systems, representing a serious bid for leadership in the global CBDC race.
In this phase, nine of the country's leading commercial banks will be tasked with developing and deploying a full-fledged ecosystem for managing the digital currency. This is not just about issuing tokens. The participating banks will create electronic wallets, implement voucher mechanisms, and build blockchain infrastructure that will directly interact with their existing account systems.
From Isolated Payments to Everyday Operations
While in the first phase the Bank of Korea distributed pilot CBDCs as deposit tokens exclusively through electronic wallets, and users could only test payments with these assets, the conditions are now changing dramatically. Pilot participants are allowed to use CBDC deposit tokens for real transactions and settlements within the existing banking system. This is a transition from isolated experiments to embedding digital money into everyday financial flows.
Additionally, the second phase includes pilot projects to replace government subsidies and targeted program funds with digital vouchers. Thus, the authorities aim not only to test the technology but also to improve the efficiency of budget allocation while reducing administrative costs.
Geopolitical Contrast: Korea Accelerates, US Slows Down
Against the backdrop of Seoul's active efforts, Washington's position appears diametrically opposite. The administration of President Donald Trump has made it unequivocally clear that a CBDC will not emerge in the US under the current leadership. Treasury Secretary Scott Bessent recently confirmed that the focus will be on America's leadership in digital assets, but not government-issued digital currencies.
Moreover, last week the US Senate and House of Representatives agreed to advance a major housing bill, which includes a provision directly banning the issuance of a CBDC until December 31, 2030. Thus, the world's two largest economies are moving in directly opposite directions: South Korea is actively integrating a digital currency into its financial system, while the US is legislatively blocking its emergence for years to come.
My analysis: South Korea is consistently transforming into a global testing ground for government-issued digital currencies. While the US, fearing for financial sovereignty and privacy, is effectively ceding the initiative to Asian competitors. If the Bank of Korea's pilot succeeds, we will witness not just a technological but also a geopolitical shift: the digital won could become a benchmark for a whole range of countries seeking an alternative to the dollar system.